The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed Cenvat Credit of service tax paid on ‘Business Support Service’ (BSS), thereby granting relief to M/s.Hindalco Industries Limited, the appellant.
M/s. Aditya Birla Management Corporation Pvt Ltd (ABMCPL) obtained Service Tax registration under the category of ‘Business Support Service’ to be provided to the group companies and duly discharged Service Tax thereon. At the end of each month, ABMCPL issued tax invoices charging its total cost on the group companies in the agreed ratio and collected Service Tax under the head of ‘Business Support Service’ in the tax invoices. The Service Tax collected was duly deposited with the Government and reflected in the periodical returns.
Two Show Cause Notices were issued to the Appellant proposing to deny the CENVAT Credit availed by them on the ground that ABMCPL are not an Input Service Distributor to distribute the service tax paid on BSS to their group companies. The ABMCPL being a distinct person cannot be said to be an office of the Appellant.
In their submissions the appellant stated that ABMCPL are providing services in relation to the business including marketing, processing of purchase orders, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, administration assistance, customer service, infrastructural support services and other transaction processing, to their group companies, which fall within the definition of ‘Support Services of Business or Commerce’ (‘BSS’) as per Section 65(104c) of the Finance Act 1994.
The Two-Member Bench of the Tribunal comprising P K Choudhary, Judicial Member and K Anpazhakan, Technical Member observed that “providing operational or administrative assistance in any manner or providing infrastructural support service or managing distribution and logistics service, fall within the ambit of ‘Business Support Service’. The ABMCPL has been providing these services to their group companies. As per the definition of BSS mentioned above, the services rendered by ABMCPL to their group companies would rightly fall under the category of ‘Business Support Service’.”
The Tribunal concluded by noting that “Hence the Appellant is entitled to avail the CENVAT Credit of service tax paid on BSS since they have a nexus with the overall business activity of manufacturing final goods and are essential for the day-to-day operations of the Appellant.”
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